Forexpros – The dollar slid against most major currencies on Thursday after Federal Reserve Chairman Ben Bernanke said U.S. monetary policy authorities cannot rule out weakening the greenback via stimulus measures to encourage hiring and price stability.
The euro was up against the dollar in Asian trading Thursday, with EUR/USD up 0.05% and trading at 1.3224.
At its April meeting, the U.S. Federal Reserve’s monetary policy body, the Federal Open Market Committee, left interest rates unchanged and made no mention in its press release of a need for extraordinary stimulus tools like quantitative easing, which are bond buybacks from banks designed to juice the economy.
At the press conference afterwards, however, Bernanke made it clear that stimulus measures remain ready to go if the economy takes a turn for the worse.
“We remain entirely prepared to take additional balance sheet actions if necessary to achieve our objectives,” Bernanke said.
“Those tools remain very much on the table and we will not hesitate to use them should the economy require that additional support.”
Also in the U.S., orders for durable goods came up short of expectations, falling 4.2% in March, their lowest level in three years, after a revised 1.9% gain the February.
The figures were much worse than forecast for a 1.7% decline.
On Friday, the U.S. government will preliminary release first-quarter gross domestic product data and in light of Bernanke’s comments, a few investors ditched the dollar to wait on the sidelines to see how well the economy is doing.
The greenback, meanwhile, was down against the pound, with GBP/USD up 0.03% and trading at 1.6167.
The U.S. currency was up against the yen, with USD/JPY trading up 0.06% at 81.37, and down against the Swiss franc, with USD/CHF down 0.04% and trading at 0.9088.
The dollar was down against its counterparts in Canada, Australia and New Zealand, with USD/CAD down 0.01% at 0.9834, AUD/USD up 0.01% at 1.0353 and NZD/USD up 0.17% at 0.8146.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.03% at 79.15.
Later Thursday, the U.S. will release government data on initial unemployment claims as well as industry data on pending home sales.
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